For the marketer of Internet marketing services to offliners

This is an interesting topic. what is your business worth...and what are your clients worth to buyers...

The reality.. they are worth far less than you think. Business' without tangible assets are usually in for a rude surprise if they decide to sell their business. Clients will have a period in the transition to leave. Clients can have contracts that end and they simply will not renew. Clients will just request to stop using the service. Clients as a position for worth is weak at best. - and buyers of a service based business generally know this.

You could be that guy in your moms basement doing SEO to the tune of 6 digits a year... and what is your "Business" worth? squat. You could be that guy that has a SEO Firm..nice office and employees cranking 7 digits a year... and what would this business be worth? In terms of business worth and after an accountant goes through it... the value could actually be a negative. ( ouch )

So what does it take to get on the plus side of things in this type of business? My answer.. back end systems that save time and money. When someone is buying me out.. they are not buying my clients.. that's just cherries on top.. they are buying the system to produce for their clients of the future in a built and developed system that cranks through the work. - THATS value - THATS an Asset.

I have had this exact discussion with a few here... Its a rough reality. The ideals of "Building for your future" with this type of business model just is not a reality. You are building for today, and MAYBE tomorrow... but not for much further than that.

Assets are tangibles... and Myself included have taken a deep look at what and How I do things and have made the obvious decisions to work on developing assets. Yes I do affiliate marketing. Yes I sell products. Yes I even do MLM. but all of these things are assets.. and all of these things do not include the need to seek clients.

I have taken my talents and actually started working for myself. its a concept. and I am sure they may be a few that may chime in here.. its not freakin easy. You go over to the main board and read about all that failure... I can tell you why.. its hard work building Assets.

I would very much liken it to developing offline assets. we have all read about Oziboomers framing shop... that's work.. that's dedication.. Online assets... I wont say it may be more work... but I know there are a bunch of us up at stupid ridiculous hours every night of the week to build our assets. - and I would say many of us would say that we know what we are doing.. and its STILL a struggle.

Business development is one thing... Asset development is a totally different animal!

Thanks Ewen for another controversial topic that will be sure to peak some interest and divide opinion.

I'm fortunate, as you are, to have tangible business interests outside of the marketing sphere.

I'd like to think some of the things that add value to a traditional offline business can be transferred to one that sells marketing services to offliners....

...but maybe not.

In most small businesses there would be the accumulation of assets and you would hope those assets exceed liabilities.

You would also hope that there was some "goodwill"...that intangible value placed on the customer list and loyalty.

In an offline sense if a business is easy to run and profitable then it could sell for 2-4 times annual net profit plus physical assets.

If the business can get up and go public then multiples of 15 times earnings are usual.

This is why some exit strategies for smaller businesses can include positioning the business to sell to a public company so they can increase their value and you can get a slightly higher multiple.

I've noticed the acquisition of Dentists and Optometrists and no doubt other allied businesses by health funds...noticeably BUPA has been running around buying up the "larger" small businesses in the health space to shore up their insurance brand.

Could marketers to offline be bought by bigger players...perhaps but only if they do have something of value to offer.

Now for businesses selling marketing services to off-liners I'd think there may be little value accumulated in the business unless...

...you have a solid duplicatable system in place...much like successful offline or franchise models

...some proprietary branded solution that can be protected or is difficult to duplicate.

...some long-term legal agreements to supply clients

....some equity share in client's businesses

...perhaps some private blog network or directory business that has regular revenue from other advertisers or clients.

Given the attention that Google has placed on eliminating PBN this model would only have a limited lifespan but maybe a legitimate content based network of authority sites much like how Digital marketer AKA Ryan Deiss has set up verticals in several markets like Survival, DIY, Make-up etc.

If you are building your client's business but interweaving a solid content based network not designed to spam but to build value for visitors then you may be able to achieve a higher re-sale value.

I don't know how much Bill Glazer and Dan Kennedy got out of, or still hold interests in, GKIC but I guess there could also be a model to look at and study as to building something that may have a tangible value to another prospective purchaser.

One big thing to consider is "Does anyone buy small marketing firms?"

Unless you can create a big enough "itch" or become a real "PIA" how can you attract that potential buyer?

Very interesting topic, thanks

JMO - most "agencies" won't be worth too much IMHO....yes, could sell your client base, website...but most people buying it will realize that much of what YOU do is unique to YOU.

Some of it does come down to "skills" - you can't sell your own "skills" - you can't sell your "sales ability" or technique....you can't sell your own graphic /design aesthetic, or your own "tricks of the trade" that you build up over the years.

Now...IF you had a very good website, facebook, etc...I guess it would be worth a bit more.

And...IF you developed something "tangible" - like a local coupon book, or a popular "directory" (yes, that is a hard niche to fill)....or a local deals/ad site connected to either or both of them....actually becoming an "ad agency" then I think you would have something more tangible to sell

Ideally you would have some proprietary software you created or something and get bought out by Google or Amazon LOL

But...just selling your "clients"? Even selling hosting clients would not get a real high price unless you found a true newbie/dreamer cause most would realize that people do jump ship and go with the latest deal.

DABK, I held onto my empire WAY too long and watched it dwindle. I hit an income and budget ceiling and nobody wanted to invest in spam. Understandable.

I learned a long time ago that I'm better at planning, building, scaling, and flipping than I am holding onto projects for too long.

Someone with a bigger budget could have turned that empire around and made millions with it. (Not tooting my own horn, here. I made peanuts from it.)

Cash in hand is worth a lot more to me than a monthly income. At least right now.

Every business or project I launch has to have an exit strategy. It's taken me a while to finally realize that about myself, though.

So many opportunities, so little time.

Thanks, Ewen.